The executor of a will is the individual or entity that will act as the estate administrator. We include the term “entity” because it would be possible to engage a professional fiduciary to act as the executor. This is a very important role, so you should think long and hard before you make a decision about who will be handling the estate administration chores after you are gone.
You may not know someone that has the time or the expertise to do the job. Even if you do know a person that may be qualified, you have to be concerned about objectivity and potential conflicts of interest. If you want to feel completely confident, you may want to find a professional to assume the role for a flat fee or a percentage or the estate.
Regardless of who is acting as the executor, the first order of business will be to identify and inventory the assets that comprise the estate. The assets must then be prepared for distribution to the heirs that are named in the last will. This can involve the sale of property so the liquidity can be distributed among multiple different inheritors.
Determine If Probate Is Necessary
Probate is the legal process of estate administration. Generally speaking, property that is in the sole possession of the deceased individual cannot be distributed until the estate has been probated and closed by the court. This being stated, property that is owned jointly by a husband and wife could be transferred outside of probate.
There are a few other ways that assets can change hands outside of probate when a last will is utilized. Insurance policy proceeds would not be subject to the probate process, and property that is held in joint tenancy would be exempt as well.
To explain by way of example, let’s say that you are a widow, and you have one son. You want to leave your home to him after you pass away. It would be possible to make him the co-owner of the home, and this is called the condition of joint tenancy. After you are gone, your son would inherit the home in its entirety, and the probate court would not be involved.
Another simple way that assets can pass outside of probate is through a payable on death account. These accounts are alternately referred to as transfer on death accounts, and they are offered by banks and some brokerages. The way that it works is you add someone to the account as a beneficiary. This person would not have access to the funds while you are alive. After your passing, the individual in question would assume ownership of the funds that remain in the account.
When it comes to property that is subject to probate, the full process is not always necessary. There is a simplified probate in Michigan for small estates that are worth less than $15,000. Plus, a small estate can be claimed through an affidavit if there is no real property involved.
Unless the assets can pass free of the probate process one way or another, the executor will admit the will to the court. Creditors must be notified about the passing of the decedent, and they are given four months to file a claim. These debts and other outstanding liabilities, like taxes, must be paid during the probate process as well. There are court costs, the executor is entitled to payment, appraisal charges can enter the picture, and attorney’s fees can be part of the equation.
All of these expenses are not very positive for the inheritors, and there is another major drawback that goes along with the probate process. The executor of a will cannot transfer any assets to the heirs until the process has run its course. In Michigan, this will typically take seven months to a year.
To steer clear of these pitfalls, it is possible to avoid probate through the utilization of a revocable living trust instead of a last will. The assets in the trust would be transferred to the beneficiaries by the trustee, an individual or entity that serves in a similar capacity as the executor of a will. These distributions would not be subject to the probate process.
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